The Car Crash Of Another Green Dream

Posted on Wed 04/09/2014 by

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Bolt New 01By Andrew Bolt ~

BatteryCarElectric cars were going to save the world, not least from global warming. But as almost always, green schemes mean red ink:

Better Place was born to be revolutionary, the epitome of the kind of world-changing ambition that routinely gets celebrated. Founder Shai Agassi, a serial entrepreneur turned rising star at German software giant SAP, conceived Better Place “on a Davos afternoon” in 2005 when he asked himself, “How would you run a whole country without oil?” Four years later, onstage at the TED conference, Agassi … decided to share his findings, that he would sell millions of electric vehicles in his home country and around the world. He implied that converting to electric cars was the moral equivalent of the abolition of human slavery and that it would usher in a new Industrial Revolution.

This was science fiction, but Agassi presented it as fact, as if just by announcing his company he had already built it… And it was intoxicating. The TED crowd gave Agassi a long standing ovation.

Agassi got virtually every meeting he ever asked for–with world leaders, celebrities, and CEOs of some of the world’s largest companies. The press anointed him the creator of a Next Big Thing. (Fast Company included Agassi on its 2009 Most Creative People in Business list.) Money from investors came fast and in big waves, roughly $900 million, and it seemed like it would never stop flowing. Until, suddenly, it did…

Agassi had assumed that the car would cost roughly half the price of a typical gasoline car and would have a range of at least 100 miles. Instead, batteries were delivered with a range of closer to 80 miles, and the terms with ¬Renault meant he was selling an unsexy family car for about the same price as a nice sedan like the Mazda3 or the Toyota Corolla. (Not to mention that customers were asked to spend an additional $3,000 or so a year to rent the battery and pay for the use of charging and swap stations.)…

Meanwhile, the cost to build out Better Place’s charging network had ballooned. The original spreadsheets that Agassi and the Palo Alto founding team had assembled called for swap stations to cost approximately $500,000 each. So, building 40 stations in Israel would cost about $20 million, while 20 in Denmark could be built for about $10 million. Ultimately, however, each switch station cost at least $2 million…

Better Place declared bankruptcy. The company and its affiliates in Australia and Denmark had raised almost $1 billion. They had only put around 1,400 or so electric cars on the road by the time the court-ordered liquidation started that spring.

This disaster broke over the heads of a couple of Australians. From 2010:

In this seminar for the Monash Sustainability Institute (MSI), Dr Alan Finkel, Chief Technology Officer for Better Place Australia and Chancellor of Monash University, will discuss the factor that will accelerate the transition to electric vehicles.

And:

The Australian former head of electric car venture Better Place, Evan Thornley, has blamed the company’s failure on poor management but says the shift away from petrol and diesel-powered cars is inevitable…

Mr Thornley, who made a fortune with his LookSmart internet venture before a brief stint as a Labor MP in the Victorian Parliament, headed Better Place’s Australian operations before becoming global chief executive.

Andrew Bolt is a journalist and columnist writing for The Herald Sun in Melbourne Victoria Australia.

Andrew Bolt’s columns appear in Melbourne’s Herald Sun, Sydney’s Daily Telegraph and Adelaide’s Advertiser. He runs the most-read political blog in Australia and hosts Channel 10’s The Bolt Report each Sunday at 10am. He is also heard from Monday to Friday at 8am on the breakfast show of radio station MTR 1377, and his book  Still Not Sorry remains very widely read.

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